By  on May 12, 2011

TOKYO — Isetan Mitsukoshi released full-year figures in line with the guidance it gave last week as it voiced concern about the "extremely serious" effect of the March earthquake and tsunami on the Japanese economy.

Last week, the department store retailer issued a profit warning, drastically cutting its estimate for the year ended March 31. In line with that guidance, the company said Thursday its full-year net profit came in at 2.64 billion yen, or $30.89 million at average exchange rates for the period, compared with a loss the year before.

Given that low base, the retailer said it expects its net profit for the current fiscal year ending March 2012 to grow more than six times to 18 billion yen, or $218.55 million at current exchange rates. But the company also gave itself plenty of wiggle room and already said it may need to revisit its guidance later in the year when the full implications of the quake become clearer.

"The earthquake just happened in March, and although April was a pretty good month, we're still not sure how big the effect will be over the coming year," explained a spokesman. "There may be more blackouts in the summer and consumer mindset may change, so depending on these kinds of things we may amend the forecasts if we think it's necessary."

Isetan Mitsukoshi blamed its steep profit drop on a series of extraordinary losses on write-downs of store assets as well as damage to its store in Sendai, the area the quake struck.

Sales for the year ended March 31, fell 5.5 percent to 1.22 trillion yen, or $14.27 billion. The retailer says its provisional forecast for the current year is for sales to rise 0.8 percent to 1.23 trillion yen, or $14.93 billion.

For the year ended March 31, the retailer posted an operating profit of 10.99 billion yen, or $128.58 million, more than double that of the previous fiscal year. It sees operating profit for the current year rising 45.5 percent to 16 billion yen, or $194.26 million.

“The company thinks that the [March quake] will have an extremely serious effect on the Japanese economy," Isetan Mitsukoshi said in a release. "Within the group, Mitsukoshi Sendai suffered damage, and after this the accident at a nuclear power plant and rolling blackouts due to power shortages have caused consumer mindsets to cool off. Because of this, we are in a situation in which it is extremely difficult to predict the outlook."

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